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sjoptions (November 30, 1999 at 12:00 am)
Yes, a Credit Spread can be very costly and dangerous. It appears to be a high probability trade, but there is a lot of embedded risk. At any time this trade can result in a very large draw-down. However, the trades that we do have a high probability and a good chance of returns up to 30%. Best of all they give us a Comfort Zone of approximately 85%..a Credit Spread only around 36%. The safety of a CS doesn't compare to what we do. It's Max Return is less too.Thanks for your comment.
mixpavel (November 30, 1999 at 12:00 am)
so the return of the involved capital is ugly + comissions are eating your profit in the right side of p/l curve -- so min risk=min profit
sjoptions (November 30, 1999 at 12:00 am)
This video was made a couple years ago, and we've really evolved this style of trade since then. It's a form of Broken Wing Butterfly, and there are many ways to construct them. Conservative traders like to do them farther out of the money to minimize risk, while aggressive traders do them closer to the money to increase theta, but then they take on more risk if there is a large move in the market. Either way, it's still a great way to lower the risk when compared to a Credit Spread.
ProtectedTrader (November 30, 1999 at 12:00 am)
you never explain the strikes you are using in your videos or the strategy - its a shame - it would help if you are more clear and open
sjoptions (November 30, 1999 at 12:00 am)
We made this video a while ago, but it's an unbalanced Broken Wing Butterfly trade in the video compared to a credit spread trade. By combining credit spreads and debit spreads, we can create trades with much lower risk than credit spreads and the return average and potential is much better than on your popular credit spread trade. For more info you can visit our website.
Thank you for watching our video.
Kellyg218 (November 30, 1999 at 12:00 am)
How did you structure the trade to be different? It looked like the same strike offsets...don't know about the size...But broken wing should have asymmetrical leg. But tell you the truth I THOUGHT I saw and understood the trade...but I didnt see the "trade" just the risk profiles. So you're shrouding in "numbers" with out actually showing the original trade structure.
sjoptions (November 30, 1999 at 12:00 am)
Yes, this particular trade is a Broken Wing Butterfly. We have been working on this type of trade for years, and it has really developed. Give us a call or visit our website to see our recent trade developments.
larryk86 (November 30, 1999 at 12:00 am)
no,, it is a broken wing butterfly,,,,,
1888junkteam (November 30, 1999 at 12:00 am)
excellent work!
cgom774 (November 30, 1999 at 12:00 am)
You were using a back/ratio spread. |
